PayPal is a payment processor that lets you send or receive money from anybody in the world. In this article, you will learn everything you need to know about PayPal and how to open a PayPal account that can send and receive money in Nigeria.
I will like to explain some things to you before showing you how to open a PayPal account in Nigeria. If you want to skip the explanations, you can use the table of content to navigate to where you want to start reading from.
However, I will encourage to read everything as you may learn something new.
Table of Contents
A Very Brief History of PayPal
When Paypal was founded in 1998, it was named Confinity before the founders’ Peter Thiel, Max Levchin and Luke Nosek rebranded it to PayPal in the year 2000. In 2002 after PayPal went public through an IPO, it became a subsidiary of eBay (later that year).
During this time, Nigerians could use PayPal to send and receive money. Unfortunately, some Nigerians used PayPal to defraud Americans and Europeans on sites like eBay, Amazon and Craigslist.
This led to the ban of Nigerians from using PayPal’s services around 2004.
Ten years later, PayPal lifted the ban but it came with a clause; Nigerian users could only send money from PayPal but were not allowed to receive.
I heard from an unreliable source that the Central Bank of Nigeria demands that PayPal must register as a Business in Nigeria before Nigerians would be allowed to receive money with their PayPal accounts. Meanwhile, PayPal is not willing to do this – yet.
Why you Need a PayPal Account
Paypal is the most Popular payment platform in the world with over 277 million users. Pymnts.com reports that 255 million of the total users are consumers while 22 million are merchants.
It is also the most used online Payment gateway in Europe and the United States. If the Nigerian Paypal account was able to receive money, it would have been the best way to get funds from relatives abroad instead of Western Union.
I guess why PayPal is popular is because it is more customer-friendly than it is merchant friendly.
Assuming a customer buys an item from a merchant and is not satisfied with the item, the customer has 180 days to request a refund on PayPal.
Although PayPal looks into refund disputes so that some mischievous customers won’t cheat the merchant.
In most cases, it is a win-win situation.
There was a time I made payment with my debit card through a certain Payment gateway used by some government agencies in Nigeria. That same day I got debit alerts that was not initiated by me.
I reported the case to them on Twitter and they never replied. I went to my bank to complain, the lady at the bank just told me sorry.
While using PayPal to make payments, you do not have to reveal your debit card details. Your card details are encrypted on PayPal’s server.
PayPal is also PCI compliant so you have nothing to worry about.
Receive Payments from Affiliate Networks and Freelance Sites
This is the top reason why a lot of Nigerians want to own a PayPal account.
After getting bonuses from affiliate networks or earnings from freelancing sites, you definitely want to get paid.
Unfortunately, the Nigerian PayPal account cannot receive funds.
Types of PayPal Account in Nigeria
There are four ways to create a PayPal account in Nigeria. I would be explaining how to open them later on.
The four ways are as follow;
- Opening a PayPal Nigeria individual account.
- A PayPal Nigeria Merchant account.
- PayPal account through FirstOnline (FirstBank internet banking platform).
- Foreign PayPal accounts (Lesotho, Dubai, UK).
This is what distinguishes the four types of accounts mentioned above;
PayPal Nigeria Individual Account
This type lets you open a PayPal account in Nigeria without hiding your IP. You can only send money with this type of PayPal account but you cannot receive money from anyone.
You should use the Nigerian PayPal account if you only intend to pay for items on foreign websites.
PayPal Nigeria Merchant Account
This account type is for registered business owners in Nigeria. It allows you to send money and receive money through your website.
In essence, a PayPal user cannot send money to you directly unless they are paying for a product or service on your website.
If you sell goods or services to a foreign market, you can use the PayPal merchant account.
PayPal Through FirstOnline (FirstBank Internet Banking)
When PayPal extended to Nigeria in 2014, it went into a partnership with FirstBank Nigeria. The main benefit of this partnership is instant PayPal verification for FirstBank customers.
A PayPal account through FirstBank doesn’t grant you access to receive money with PayPal.
It is basically the same thing with the aforementioned except that your account gets verified faster.
Foreign PayPal Accounts
Due to the fact that you cannot really do much with a Nigerian personal PayPal account, some people opt in for foreign PayPal accounts, i.e PayPal accounts of countries that can send and receive money.
The most popular of such countries are Dubai (UAE) and Lesotho.
Now, this PayPal account lets you send and receive money but it could also be a time bomb waiting to explode.
There have been lots of reports of people who PayPal seized the money in their accounts immediately after they (PayPal) noticed foul play.
How to Open a Nigerian PayPal Account
Before we get started on this, you need to know what you want to use your Nigerian PayPal account for.
Are you using it for your business (must have a website) or to pay for goods and services online?
Step 1: Visit PayPal.com.
Step 2: Choose your account type; personal or business.
You can select Personal by just clicking the top of the screen. For the merchant/business account, click on business account.
You can use the links below for easy access to the respective sign up pages;
Personal account: https://www.paypal.com/welcome/signup/.
Business account: https://www.paypal.com/bizsignup/.
Step 3: Enter your correct details.
If you are opening a business account, enter the name of your business as it is on your CAC certificate.
Please note that the information you fill in may be subject to verification so it is wise to fill everything correctly. If any information is wrong, you may lose your account with the funds in it.
Step 4: Confirm your email address.
Login to your email address, open the message from PayPal and click the confirm your email address button.
You will be asked to enter your password again to confirm.
Step 5: Enter your debit card details.
Most MasterCard and Visa debit cards from Nigerian banks work. Although there have been reports of some bank cards not working.
Some of the banks that work perfectly with PayPal include;
- Zenith Bank.
- Access Bank.
Once you have entered your card details, an equivalent of $1.95 will be debited from your bank account.
This is to verify that your card actually works. The money will be refunded after you have verified your PayPal account.
Step 6: Verify your Paypal Account.
A four digit code will be sent to your mobile phone. On getting this code, login to your PayPal account.
Click on Activate account and enter the four-digit code. The code you need to enter is the four-digit number after *PP.
Note: The *PP code can also be found in your statement of account.
If you don’t get this code in an SMS, login to your bank’s internet banking platform to view your statement of account or go to your bank to request for your statement of account.
Are you having issues verifying your PayPal account, check out this detailed article on how to verify your PayPal account in Nigeria.
How to Open a Dubai/Lesotho PayPal Account
A Dubai or Lesotho PayPal account gives you the privilege to send and receive money through PayPal. However, you have to be careful while using it as I stated earlier.
If you had a PayPal account prior to this, it’s advisable you close it and maintain only this new account.
Step 1: Visit the PayPal website of the corresponding country you want.
Step 2: Select personal account.
If you select a business account, you may be asked to present registered business documents.
Step 3: Fill in your correct details.
You should enter your correct phone number and address. An international passport is the best proof of identity on PayPal; although other ones still work fine.
Step 4: Add your Debit card.
Login to your PayPal account and click on add debit card. Enter your card details and click on save.
For Dubai and Lesotho PayPal account, your card details are verified automatically.
These are some of the things you need to do to prevent your PayPal account from getting banned;
Do no leave huge sums in Foreign PayPal accounts
If you opened a Foreign PayPal account, do not leave huge sums of money you cannot afford to lose in the account. You can use the services of PayPal exchangers in Nigeria to withdraw your money from PayPal.
Use a Dedicated VPN
One of the reasons why PayPal limits account is because of the fluctuating IP address people use to access their accounts. This is for security purpose only.
Nigerian internet service providers (ISP) do not give dedicated IP addresses.
To prevent your PayPal from getting flagged, you should use a dedicated VPN of the countries PayPal you opened.
If you opened a Dubai PayPal, use a dedicated Dubai VPN to access your PayPal account.
I doubt if there’s a dedicated VPN for Lesotho.
If you need a dedicated VPN for your PayPal account, I recommend dedicated VPN’s from IJAM Exchange. They also have other tools to you might need to operate your Foreign PayPal account.
Be honest with your Dealings
Only request for a refund when it is necessary. PayPal can limit your account if they notice a pattern of frequent refunds.
Do not use your PayPal account for illegal businesses or to scam. If you do, your account will definitely get banned.
Buy PayPal Funds only from Legitimate Sellers
If you buy PayPal funds from people who get their own funds through illegal means, the funds will be seized and probably returned back to the owner.
Your PayPal account might no get banned but most exchange will not issue you a refund.
Side note: My PayPal account got banned in 2022. I have written an article on why it got banned and what I did after the ban. You can read about my PayPal ban here.
Owning a PayPal account opens you to a world of possibilities. As a business person, you can sell your product or service to anyone in the world.
When customers buy products or service through PayPal, they are certain to get their money back if you don’t deliver quality service to them – This alone makes people prefer PayPal to other payment methods.
As a business owner that provides quality goods and service, this translates to more sales for you.
If you are a freelancer or an affiliate marketer, a PayPal account that can receive money means more income for you.
I hope in the nearest feature, Nigerians will be able to receive money through PayPal without using VPN’s.
What problem are you having opening a PayPal account? let’s hear from you in the comment section.